Nissan is reportedly planning to set up a second vehicle manufacturing plant in Thailand. According to the Japanese business daily the Nikkei, the OEM is looking to invest around ¥30bn (US$376m) in the facility as part of efforts to diversify its production operations in Asia, following the recent troubles in China.
The proposed facility would be located in Samut Prakan, near Nissan’s existing plant. The current facility builds the March/Micra and has an annual capacity for 200,000 units a year. The new plant is reportedly slated to open in 2014 with an initial annual capacity of 100,000 passenger cars and 1-tonne pick-ups. Output capacity at the second plant would later rise to 200,000 vehicles a year, which would double the OEM’s total capacity in the country.
Kyodo reports that the decision to add a new plant follows the collapse of a project to develop and build a new pick-up in collaboration with Mitsubishi, with the model to be made at Mitsubishi’s own Thai plant. It also comes in the wake of rising anti-Japanese sentiment in China, which has forced Nissan and other OEMs to scale back production in the country. At the moment, Nissan’s Asian operations are concentrated in China. However, the current protests against Japanese goods and general anti-Japanese sentiment there, following a land dispute over two of a group of East China Sea islands has seriously damaged Nissan’s sales.
An additional facility in Thailand would provide it with a more diversified presence in the region. Nissan’s compatriots Mitsubishi and Toyota both recently announced new investment in Thailand. Mitsubishi is investing Baht 1bn (US$32.7m) to boost production and expects Thailand to become its largest production base for cars in the world, replacing Japan. Toyota is investing ¥16.9bn to build a new plant, the Gateway Plant No. 2, and another ¥40bn to increase production capacity of diesel engines in the country.
According to the Nikkei, Nissan aims to more than double its share of the new vehicle market in Thailand to 15% by 2016. Nissan’s existing Thai plant was forced to close during the disastrous flooding last year, but fared better than many others. Honda was the worst hit of all the OEMs; its Ayutthaya facility, which makes the Civic and CR-V models, was flooded and evacuated, with operations halted for several months. However, the government has since taken various steps to maintain investor confidence in the country as a production hub. A Baht 350bn long-term plan for managing Thailand’s river basins is being developed so that industrial estates and economic areas will be protected from any future flooding.
